Chapter 19 - § 19.9 • INTERPRETATION AND OPERATION OF DEEDS

• Jurisdiction: Colorado

§ 19.9 • INTERPRETATION AND OPERATION OF DEEDS

§ 19.9.1—Interpretation in General

Construction of a deed is a matter of law.⁴⁶⁰ In construing a deed, the purpose of the court is to give effect to the instrument.⁴⁶¹ Words used in a document are to be given their plain meaning.⁴⁶² The obvious meaning of plain words is the meaning to be applied, rather than a different meaning which requires the addition of unused words to modify the import of the plain words.⁴⁶³ Oral agreements, understandings, and conditions made contemporaneously with the execution of a deed cannot be shown to vary the terms of the deed.⁴⁶⁴ Under the doctrine of merger, a deed delivered and accepted as complete performance of a contract for the sale of land merges all prior negotiations and agreements into the deed.⁴⁶⁵

A deed must be construed in its entirety,⁴⁶⁶ to harmonize all of its provisions and give force and effect to all of its language, if possible.⁴⁶⁷ The construction of a deed should not be based upon portions presented in isolated sentences and clauses.⁴⁶⁸ In the case of an inconsistency, the granting clause prevails over the habendum clause.⁴⁶⁹ Where two deeds are conveyances of interests in the same property from the same grantee to the same grantor, the deeds must be construed together.⁴⁷⁰

If a contrary interpretation would make an instrument void or meaningless, an instrument involving property rights will be, when possible, construed as valid.⁴⁷¹ Thus, a power to sell or encumber real property held by an attorney-in-fact with no other interest in the property is considered properly exercised by a deed executed in his or her own name without reference to the power.⁴⁷²

Ambiguities

If there is an ambiguity in the terms of an instrument, then the construction must favor the grantee.⁴⁷³ An ambiguity is an uncertainty of the meaning of language used in a written instrument, including a deed.⁴⁷⁴ Whether an ambiguity exists is a question of law.⁴⁷⁵ In determining whether a deed is ambiguous, a trial court may conditionally admit extrinsic evidence on that issue, but if it is ultimately determined that the document is unambiguous, the conditionally admitted evidence must be stricken.⁴⁷⁶ If the language of the instrument is plain, its meaning clear, and no absurdity is involved, it must be enforced by the court as written.⁴⁷⁷ A deed which accurately and correctly describes a tract of land is not subject to construction or interpretation.⁴⁷⁸ A latent ambiguity may be resolved by extrinsic evidence,⁴⁷⁹ but extrinsic evidence is not admissible to alter, vary, explain, or change the deed.⁴⁸⁰

Intent

The paramount purpose in construing a deed is to ascertain the parties' intent.⁴⁸¹ A deed is to be construed in accordance with the intent of the parties as determined, if possible, within the four corners of the document.⁴⁸² It is only when an instrument is ambiguous that the parties' intent becomes open to interpretation.⁴⁸³

Recitals

Recitals are introduced for the purpose of explaining why the deed is executed, or of showing circumstances which preserve the connection in the chain of title. In actions in which the purpose of the deed is directly involved, particular recitals are conclusive evidence of the facts recited. Parties to a deed are bound by the recitals in it legitimately appertaining to the subject matter.⁴⁸⁴

§ 19.9.2—Interests or Property Conveyed

Fee

Fee simple: A grantor is presumed to convey the highest estate he or she owns,⁴⁸⁵ unless a smaller estate is described.⁴⁸⁶ Thus, a conveyance is presumed to transfer a fee simple estate, unless a lesser estate is limited by express words or by operation of law.⁴⁸⁷ Words of inheritance are not required.⁴⁸⁸ A good title in fee simple means the legal estate in fee, free and clear of all claims, liens, and encumbrances, uniting all the elements constituting ownership, including the right of possession and right of property.⁴⁸⁹ A conveyance "subject to" certain matters indicates exceptions to the general rule that property is conveyed free and clear of all encumbrances and restrictions.⁴⁹⁰

A conveyance of land by general description, without any reservation of a mineral interest, passes title to both the land and the underlying mineral deposits.⁴⁹¹ Valid reservations or exceptions of mineral rights presumptively constitute a sufficient defect in title to render a seller's title unmarketable.⁴⁹²

A grantee takes nothing by a deed from a grantor who has no title,⁴⁹³ except to the extent that the grantee's title results from the operation of the recording act. Similarly, a power of attorney to convey certain land, given by one with no interest in the land, is void.⁴⁹⁴ One who has no possessory interest in land cannot grant a license to use the land.⁴⁹⁵ A tax title cuts off all right, title, and interest of the prior owner as of the date of the tax deed, and thereafter a deed from the prior owner conveys nothing.⁴⁹⁶ A deed from a grantor having no record title is a "wild deed," and if found, may be ignored.⁴⁹⁷ If the grantor does in fact have title, the subsequent recording of the deed whereby the grantor acquired title will render the "wild deed" merely another link in the chain of title.⁴⁹⁸

Fee tail: The estate in fee tail does not exist in Colorado. Before May 25, 1983, a conveyance which, at common law, would have created an estate in fee tail created a life estate in the first grantee with a remainder in fee to the person to whom the estate would have passed on the death of the first grantee. On and after May 25, 1983, a conveyance which, at common law, would have created an estate in fee tail creates a fee simple estate in the first grantee.⁴⁹⁹

Future Interests

Whether a particular type of future interest is transferable, either by deed or by will, is a question of some complexity.⁵⁰⁰

Incidents and Appurtenances

Possession: A conveyance of real estate or any interest therein, duly executed and delivered, carries with it the right to immediate possession of the premises or interest conveyed, unless a future day for the possession is specified.⁵⁰¹ The intention to postpone possession must appear in the conveyance itself, and cannot be proved by parol.⁵⁰² No right of possession arises under a void deed.⁵⁰³ Occupancy under a void tax deed is a trespass.⁵⁰⁴

Appurtenances: Appurtenances normally pass as an incident to the grant.⁵⁰⁵ The word "appurtenances" has a technical meaning when used in conveyances of land. It generally refers to intangible rights, such as water rights or easements, that necessarily must be conveyed for the beneficial use of the land. The term occasionally may be used to refer to physical fixtures or improvements to land. The term also occasionally may be used to convey an interest in physical fixtures that extend beyond the land but are necessary for the use of the land.⁵⁰⁶ It does not refer to business transactions on the land.⁵⁰⁷ In a conveyance of specified land, other land does not pass as an appurtenance.⁵⁰⁸

Water rights: Whether water rights are appurtenant to land is generally a question of fact, as is also whether on a sale or transfer of the land, the water right passes as an appurtenance.⁵⁰⁹

Personal property: A deed of real property does not transfer personal property unless the personal property is described with particularity.⁵¹⁰ In Colorado, when real property is conveyed and personal property is also transferred or used as security, it is customary to use two separate documents.⁵¹¹

§ 19.9.3—Exceptions and Reservations

It is undisputed that there are technical distinctions between an exception and a reservation. What is disputed is whether or not one of the two words can be used and have the meaning of the other word applied to it.⁵¹² Generally, an exception withholds from a conveyance an estate or interest in the land which has previously been severed and usually is not owned by the grantor.⁵¹³ An exception need not, however, relate to an estate or interest previously severed.⁵¹⁴ On the other hand, a reservation withdraws from the land conveyed a new and independent right or estate which is retained by the grantor.⁵¹⁵ A reservation is a vehicle by which a grantor creates and reserves to himself or herself some right or interest in the estate conveyed, which interest had no previous existence.⁵¹⁶ A grantor may reserve a wide variety of interests, such as easements, profits, timber, water rights, or mineral rights.⁵¹⁷ But there can be no reservation in the absence of appropriate language.⁵¹⁸ A dedication is not a reservation.⁵¹⁹

Although historically a distinction has been drawn between an exception, which refers to some part of the property not included in the conveyance and with which the grantor never parts, and a reservation, which has been interpreted as the creation in the grantor of a new right or interest in the premises conveyed, Colorado case law recognizes that these terms are often used interchangeably without any intent to preserve the historical distinction, and that the historical distinction is without significance when the deed itself unambiguously manifests the intent of the parties.⁵²⁰ The modern conception of conveyancing looks to the intent of the grantor from a consideration of the entire instrument, and when that intent is ascertained, an exception may be construed as a reservation and vice versa.⁵²¹ Reservations are construed more strictly than grants, and any ambiguities are construed against the grantor.⁵²²

Influenced, perhaps, by the printed form of warranty deed that has been used in Colorado, many grantors have inserted exceptions or reservations in the most convenient blank area available on the face of the deed form, which is in the warranty clause.⁵²³ The Colorado courts have held that an exception from the warranty is not an exception from the conveyance.⁵²⁴ An exception inserted into the warranty clause only protects the grantor on the warranty and does not serve as a limitation on the nature of the...